Los Angeles-based personal injury attorney Neama Rahmani looks at a recent class action filed in California against scooter rental companies Bird and Lime, the companies’ defenses, and alternatives to lawsuits to protect riders and pedestrians injured by unsafe drivers or by tripping over abandoned scooters. The insurance industry is missing a golden opportunity and the scooter rental industry should use its clout to help create a new legal framework, including mandatory insurance coverage and safety equipment.

When a number of pedestrians in Southern California were injured by electric scooters operated by unsafe drivers, or by tripping over abandoned scooters, their lawyers saw a perfect opportunity to go after the well-heeled scooter rental industry. They filed a class action lawsuit in October against scooter rental companies Bird and Lime along with manufacturers Xiaomi and Segway, accusing them of “gross negligence” and “aiding and abetting assault.”

Bird and Lime, the two biggest operators in a rapidly growing and highly profitable market, have managed to infiltrate metropolitan areas with their e-scooters, in many cases before cities even start to get their arms around the problems inherent with this technology and develop meaningful permit programs. Cities are now playing catch-up, implementing pilot programs and rules governing everything from sidewalk restrictions to safety equipment.

The scooter companies have taken a page out of the ride-hailing industry playbook. Like Uber and Lyft, the scooter behemoths have expressly disclaimed liability with every e-scooter they rent. Their position, similar to that of Uber and Lyft many years ago, is that they are merely a technology company; how the vehicles are used is beyond their purview.

The scooter companies have made liability waivers and arbitration provisions central conditions of their rental agreements. This means that a scooter driver who suffers an injury during operation—whether crashing into a building or being hit by a car--- has virtually no recourse against the rental company. The terms of service release liability except in the cases of gross negligence, a difficult standard for an injured plaintiff to meet. A case taken to arbitration is likely to be decided in favor of the business, despite rental terms and conditions that are generally difficult to read and understand on-line, click-to-accept boilerplates.

Plaintiffs’ attorneys saw their opportunity to bypass liability disclaimers and forced arbitration by filing their class action on behalf of pedestrians, with whom there was no privity of contract. Bird and Lime, along with some of their smaller competitors, were named in the lawsuit filed on behalf of eight initial plaintiffs. Borgia v. Bird Rides Inc., 18STCV01416 (L.A. Sup. Ct., Oct. 19, 2018). The plaintiffs allege, among other things, that the companies negligently contributed to injuries by “dumping” scooters on public streets without appropriate warning and enabling other actions that they should have known would create a dangerous “public nuisance.”

The companies’ scooters exhibit “a wanton disregard for the safety of others,” according to the complaint, because the risks posed by them “were known and/or knowable” based on “professional knowledge” within the transportation community. Additionally, the plaintiffs charge, the vehicles contain defective electronics and mechanical parts, as well inadequate safety instructions for riders.

To underscore this last point, Lime was forced in October to pull some of its scooters from the Los Angeles and San Diego markets due to a battery defect that could lead to the scooters catching fire, and other serious mechanical defects have since been found in scooters Bird and Lime rent.

Class Action Faces Slim Odds of Success

As compelling as it is, the class action lawsuit faces slim odds of success. To establish a prima facie case for assault, the plaintiffs will be required to show that the companies acted intentionally, not just negligently, when they rented their scooters and that they knowingly exposed the public to risk.

It will be difficult, if not impossible, to convince a judge that Bird and Lime intended to harm third parties, and in comparative negligence states such as California, juries are likely to find scooter riders primarily liable for the consequences of their reckless driving, giving rental companies a mere slap on the wrist for their role in the incidents.

The tragedy is that emergency room physicians are seeing sharp increases in scooter-related injuries, and statistics show significantly higher rates of severe injury and fatal crashes with scooters than with cars. Scooter drivers are frequently untrained and/or under the influence of drugs or alcohol. And almost none of them have insurance.

Insurers Missing a Golden Opportunity

Private insurance for scooters is virtually nonexistent. Most major carriers refuse to underwrite policies to cover these vehicles. Thus, a teenager who injures himself by driving a scooter too fast or who crashes into a pedestrian on the sidewalk cannot rely on his parents’ auto policy to cover his own medical expenses or to protect him from third-party claims.

The insurance industry is missing a golden opportunity. Electric scooters have been gaining popularity across the country, touted as a low-cost, free-wheeling way to get around major urban areas. They are now facing significant backlash, however, from pedestrians, car drivers, city planners, and others because they leave a trail of destruction for which no one claims responsibility. Insurers could help resolve the current impasse with a new offering: liability insurance that covers injuries and property damage arising out of the use of scooters.

Instead of using its resources to induce lawmakers to weaken safety laws, as Bird did in California to remove the helmet requirement for riders over 18, the industry should use its clout to help create a new legal framework to address the challenges posed by these vehicles, including mandatory insurance coverage and safety equipment.

When ride-hailing customers raised an outcry over inadequate insurance coverage—recognizing that drivers lacked the means to purchase good policies—the California legislature mandated $1 million in coverage for passengers and third parties injured in or by a service vehicle. The same model should extend to scooter companies. The cost of insurance could be factored into rental fees, a small price to pay for a critical pool of coverage.